For anyone who directly hooks up their iPod to a high end car stereo, do you find that AAC at 192 kbps (itunes encoded) produces the same sound quality as an audio CD? It seems to when I burn 192 kbps encoded files to a CD and play the audio CD on my car stereo (where as 128 kbps files show noticable artifacts, that are sometimes not noticeable on the iPod) but I'm getting a direct iPod connection soon and wondered if the results are similar.

No one car answer that question for you but you.

Cars audio enviroments change drastically from one car to another. Also, they're noisy but you could have tweeters placed near your ears that result in a boost in high frequencies. In that case you could be more susceptible to artifacting.

I have a pretty good car stereo and use MP3 between -V4 and -V2. It varies. I very rarely notice problems and sometimes I can't be sure they're not due to placebo effect or poor production (music sounds very different in car generally) since I've not ABX'd anything. Also, I have a 15 band /channel EQ I've set up to help compensate for the car enviroment so I could be less susceptible to artifacting in my car.

Ultimately, I think it's highly probable that 192kbps AAC will be more than enough.

You can't go wrong with 192Kbps AAC.

I even have my doubts about 128kbps files showing artifacts in a car environment.

Agreed.
A car is a very noisy environment with severe ambience. Experiment away.
Myself, I would even have a go at something as low as 64-ish kbps or some PS grade bitrate.

Good thinking!